Major U.S. stock indexes closed nearly flat on Friday, with the Nasdaq Composite declining by 0.22%. Notably, the small-cap index rose by 1.2%, while the equal-weighted S&P 500 index gained 1.0%, approaching its all-time high. Analysts suggest that a 'de-weighting' characteristic has emerged within the market. Amazon fell by 0.41%, marking its ninth consecutive day of declines and recording the longest losing streak since 2006.
On Friday Eastern Time, the three major indices closed mixed, with the S&P 500 Index nearly flat, the Dow Jones Industrial Average slightly up, and the Nasdaq Composite down. At the close, the Dow Jones Industrial Average rose 0.10% to 49,500.93 points; the S&P 500 Index gained 0.05% to 6,836.17 points; and the Nasdaq Composite fell 0.22% to 22,546.67 points.
Data released by the U.S. Bureau of Labor Statistics showed that January's Consumer Price Index (CPI) increased by 2.4% year-over-year and 0.2% month-over-month, both below market expectations, compared to previous values of 2.7% and 0.3%, respectively. Excluding volatile food and energy prices, core CPI in January rose 2.5% year-over-year and 0.3% month-over-month, in line with market expectations.
Phil Blancato, Chief Market Strategist at Osaic, stated: "This is good news for the markets and for Kevin Warsh, who is widely considered to be the next Federal Reserve Chair. It’s just one month of data, but if this trend continues, it will pave the way for rate cuts and inflation control."
All three major indices posted weekly losses, with the S&P 500 Index down 1.4%, marking its second consecutive weekly decline; the Dow fell 1.2%; and the Nasdaq dropped 2.1%. Notably, the small-cap index rose 1.2%, and the equal-weighted S&P 500 Index climbed 1.0%, nearing its all-time high. Analysts noted a 'de-weighting' phenomenon emerging within the market.
According to Wall Street News, the U.S. January CPI rose 2.4% year-over-year, below expectations, while core CPI hit its lowest level in four years. Following the data release, traders increased their bets on interest rate cuts within the year, with expectations for cumulative cuts amounting to approximately 62 basis points.
Large-cap technology stocks were the main drag on the broader market, with the Mag 7 index falling 1.1%. Among them, $Amazon (AMZN.US)$ one stock recorded its ninth consecutive trading day of declines, marking the longest losing streak in nearly two decades. The semiconductor index rose 0.7%, while the software ETF rebounded 2.2%, though it was insufficient to drive a full recovery across the tech sector.
From a technical perspective, the S&P 500 Index broke below its 50-day moving average but found support near its 100-day moving average.
SaaS stocks rebounded, closing unchanged from the previous day’s price.
According to Goldman Sachs traders, signs of market fatigue have emerged. Thus, after a turbulent and challenging week, the overall market edged slightly higher, with Goldman Sachs’ AI venture portfolio turning positive for the first time in five days.
Data shows a significant divergence in the internal structure of the U.S. stock market. Large-cap technology stocks have weakened consecutively, with factor volatility rising significantly. Over the past 20 trading days, factor trading volume has reached 27.7 times its normal level, while trading volume in the S&P 500 Index remains below 15 times, masking intense sector rotation beneath the surface index stability.
This week, despite some recovery on Friday, the S&P 500 recorded its second consecutive weekly decline, retreating about 2% from its late-January peak. Structurally, defensive sectors outperformed, while financials and some growth-oriented sectors that had been affected by the 'AI disruption' narrative experienced heightened volatility.
Following the release of CPI data, U.S. Treasury yields fell across the board. The 2-year yield dropped by 5 basis points, nearing its lowest level since 2022; the 10-year yield fell to 4.05%. Market expectations for no rate action in March remain solid, but pricing for rate cuts in June and July has risen significantly.
Growing expectations of Federal Reserve rate cuts weighed on the U.S. dollar, but declines were limited due to the relative resilience of the U.S. economy compared to other countries. The Japanese yen recorded its largest weekly gain since November 2024. Although cryptocurrencies rebounded strongly on Friday, their performance remained volatile on a weekly basis.
Against the backdrop of falling yields, gold benefited significantly. Spot gold rose 2.3% to $5,033 per ounce, reclaiming the key $5,000 psychological level, while silver gained nearly 3%. Institutional analysts noted that inflation's trajectory has not spiraled out of control again, and with the mid-year rate cut window opening, gold is seeing support at the asset allocation level.
Bitcoin surged to touch $69,000.
Wall Street News reported that the U.S. is considering partially lifting tariffs on aluminum and steel. LME aluminum futures once fell more than 2.7% before paring losses to close at $3,078 per ton.
Crude oil posted its first back-to-back weekly decline this year, with WTI remaining nearly flat around $63 per barrel. The market is weighing the combined impact of potential OPEC+ production increases, progress in U.S.-Iran talks, and volatility in risk assets.
U.S. markets will be closed for one day next week due to Presidents' Day, followed by the release of U.S. PCE price index and Q4 GDP data. After the CPI signaled a 'cooling,' market focus will shift from 'whether it will heat up again' to 'when rate cuts will truly begin.'
U.S. stock indices ended mixed on Friday. Utility ETFs led declines, closing down over 2.7%, making them the worst-performing sector ETFs. Amazon fell 0.41%, marking its ninth consecutive daily decline, the longest losing streak since 2006.
U.S. Equity Benchmark Indices:
The S&P 500 Index closed up 3.41 points, or 0.05%, at 6836.17 points.
The Dow Jones Industrial Average closed up 48.95 points, or 0.10%, at 49500.93 points.
The Nasdaq Composite Index fell 50.477 points, or 0.22%, to close at 22546.671 points. The Nasdaq 100 Index rose 45.12 points, or 0.18%, to close at 24732.732 points.
Russell 2000 IndexClosed up 1.18%, at 2646.70 points.
The VIX volatility index, also known as the 'fear gauge,' fell 1.06% to close at 20.60.
U.S. sector ETFs:
The Utilities ETF gained 2.76%, while the Biotech Index ETF rose 1.09%, and the Healthcare ETF climbed 1.07%. The Internet Index ETF, Regional Banking ETF, Energy ETF, Banking ETF, and Semiconductor ETF all increased by at least 0.4%.
Mag 7:
The Mag 7 index dropped 1.34% to 192.61 points, with a cumulative weekly decline of 3.61%, continuing its downward trend.
Tesla edged up 0.09%,$Microsoft (MSFT.US)$ Declined by 0.13%, Amazon fell by 0.41%, marking its ninth consecutive trading day of declines, the longest losing streak since 2006. Google dropped by 1.06%, and Meta fell by 1.55%. $NVIDIA (NVDA.US)$ Fell by 2.23%, $Apple (AAPL.US)$ Dropped by 2.27%.
Semiconductor stocks:
The Philadelphia Semiconductor Index closed up 0.66% at 8137.859 points.
Taiwan Semiconductor ADR declined by 0.51%, while AMD rose by 0.67%.
Chinese concept stocks:
The Nasdaq Golden Dragon China Index closed down 0.10% at 7591.86 points, with a cumulative decline of 2.77% this week.
Among popular Chinese stocks, New Oriental closed down 2.3%, Alibaba fell by 2.1%, Pony AI dropped by 2%, and Li Auto, JD.com, BYD, and Baidu fell by up to 1.8%.
Other individual stocks:
$Coinbase (COIN.US)$ Surged by 16%. $Circle (CRCL.US)$ rose nearly 6%.
European stock markets rose by approximately 0.1% this week, with telecommunications, materials, and auto parts sectors gaining around 4%, while the banking sector fell more than 5%. The German stock market gained about 0.8% this week, while the Italian banking sector closed down 3.3% and cumulatively fell by about 5.3% this week.
Pan-European stocks:
The European STOXX 600 Index closed down 0.13% at 617.70 points, with a cumulative increase of 0.09% this week. It continued to rise from Monday to Thursday but plummeted sharply near the close of European trading on Thursday.
The Eurozone STOXX 50 Index closed down 0.43% at 5985.23 points.
National indices:
The German DAX 30 Index rose 0.25% to close at 24914.88 points, with a cumulative weekly gain of 0.78%, but saw significant declines in late trading on Thursday.
The French CAC 40 Index fell 0.35% to close at 8311.74 points, with a cumulative weekly gain of 0.46%.
The UK FTSE 100 Index rose 0.42% to close at 10446.35 points, with a cumulative weekly gain of 0.74%.
Sector and Stock Performance:
Among the blue-chip stocks in the Eurozone, L'Oréal fell 4.93%, Deutsche Bank dropped 3.97%, UniCredit declined 3.79%, and Banco Bilbao Vizcaya Argentaria fell 3.44%, marking the fourth-largest decline.
Among all components of the European STOXX 600 Index, Interpump Group plummeted 18.31%, Tomra Recycling Systems fell 8.66%, Bank of Ireland Group dropped 6.12%, and Norsk Hydro ASA declined 5.94%, recording the fourth-largest drop.
In terms of sectors, the STOXX 600 Telecommunications Index gained 4.05% for the week, the Basic Resources Index rose 4.01%, the Automobiles & Parts Index increased by 3.90%, the Chemicals Index advanced 2.77%, the Healthcare Index climbed 2.59%, and the Food & Beverages Index grew 2.57%.
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Editor/Stephen
